A 5% stake in AI coding startup Cursor, which FTX’s bankruptcy estate sold for $200,000 in April 2023, would be worth about $3 billion today, following SpaceX’s agreement this week to acquire the company for $60 billion.
SpaceX said Monday it has the right to buy Cursor later this year for $60 billion or to pay $10 billion if the full acquisition does not go through. The deal is founder Elon Musk’s move to close the gap with OpenAI and Anthropic on AI coding tools, an area where he recently said xAI, the Musk-run AI company that merged with SpaceX, is behind the competition.
SpaceX is holding off on immediate acquisitions due to its planned initial public offering, which aims for a $2 trillion valuation, with the $10 billion serving as a breakup fee.
The crypto angle is in the hood table. In April 2022, Alameda Research, the trading firm founded by Sam Bankman-Fried and run alongside FTX, invested $200,000 in Anysphere, the company that builds Cursor.
This investment bought about 5% of the company at a value of $4 million. A year later, FTX had collapsed, Alameda and FTX were in bankruptcy, and the court-appointed estate sold the Cursor stake for the same $200,000 that Alameda had paid.
The stake is worth $3 billion to SpaceX’s $60 billion price tag, meaning the gap between what the FTX property received and what the position would fetch today is about a 15,000 times return. It was instead realized by whoever bought it out of bankruptcy rather than the creditors, for whom the estate was supposed to maximize recovery.
The timing cuts the awkwardness for FTX’s bankruptcy administration.
Bankman-Fried, currently serving a 25-year federal sentence, has spent the past year arguing from prison that FTX’s estate destroyed billions in value by liquidating assets too quickly during the bankruptcy, and that clients could have been made more whole if the process had held positions instead of selling them at what turned out to be the bottom of crypto prices.
In February, he shared a projection suggesting that FTX’s net worth would have reached $78 billion if the estate had held assets through the subsequent recovery rather than selling in 2023 and 2024.
Cursor launched its AI coding product in early 2023, the same year the estate sold the stake, and the company’s trajectory from that launch to its current valuation three years later is among the steepest in software startup history.
FTX customers have since been made whole in dollars under the bankruptcy distribution plan and have received their debt value plus interest back. What they didn’t receive is the upside of what those assets became between the bankruptcy filing and now, which in the case of the Cursor stake alone represents about $3 billion in lost recovery against $200,000 realized.
Bankman-Fried’s parents have publicly advocated for a pardon and appeared on CNN in March, arguing that FTX customers were ultimately repaid and that the case against their son should be reopened. The marker number is likely to feature prominently in the family’s ongoing campaign and in Bankman-Fried’s own letters from prison, as the clearest example of the kind of value he claims the estate destroyed in the foreclosure sale.
